NIH Looking to Kick-Start Biotech Startups

Last fall, microbial ecologist Kei Fujimura took time away from her lab work to hunt down people with inflammatory bowel disease on Facebook. The postdoctoral researcher at the University of California, San Francisco (UCSF), was doing a bit of market research, in hopes of starting a company that would offer people with Crohn’s disease and colitis personalized microbiome sequencing data that could help them manage their conditions. She and a fellow postdoc “thought we had a pretty good shot” at commercializing the idea, she says.

To help find out, Fujimura had applied to—and won a place in—a special 7-week entrepreneurship boot camp offered by UCSF. Step one, she learned: gauge interest in her product by interviewing 100 potential customers. That meant identifying people by means of social media willing to share their reactions to her pitch.

Soon, the National Institutes of Health (NIH) hopes to have a lot more biomedical researchers following Fujimura’s path. Earlier this month, the agency announced that it will, for the first time, offer certain grantees a chance to participate in boot camps like the one offered by UCSF. The goal: to see if a bit of training can help wannabe entrepreneurs make the leap from science to the market and increase the economic impact of the federal government’s investment in research.

The NIH move marks the latest expansion of an increasingly popular training approach begun 3 years ago by the National Science Foundation (NSF). Known as the Innovation Corps (I-Corps) program, it offers a startup crash course, along with $50,000, to research teams wanting to learn how to think about commercializing their NSF-funded research. Each team typically consists of a principal investigator, a graduate student who is expected to lead the effort, and a mentor with experience in industry. Nearly 300 NSF-funded teams have gone through the training, which is based on a “Lean LaunchPad” course developed at Stanford University in 2011 by serial entrepreneur Steve Blank.

I-Corps generated buzz in the media and academic circles, and the curriculum—driven by the mantra that researchers must “get out of the building” and discover the potential customer base early in the development process—has since spread to other government agencies. For example, grantees of the Department of Energy’s Advanced Research Projects Agency-Energy can now apply for I-Corps training.

But some, including Blank himself, were skeptical that the I-Corps model would work for life sciences. That’s because market-oriented bioscientists face hurdles other would-be entrepreneurs don’t necessarily face, says Stephanie Marrus, director of the entrepreneurship center at UCSF. Candidate pharmaceuticals and medical devices, for example, must wend their way through a complicated regulatory system to approval, often propelled by billions of dollars in investment. Entrepreneurs have to anticipate how hospital purchasing systems might respond to their inventions, and explore whether health insurers—who cover a major share of health spending—will be willing to foot the bill. “It’s a level of complexity that hadn’t been contemplated in the initial [Lean LaunchPad] framework,” she says.

Still, Marrus lobbied Blank and the I-Corps leadership to tweak the I-Corps formula and offer it to UCSF’s biomedical researchers. The teams would pay a small fee to participate, and would get the same I-Corps lessons in how to find the target market and use feedback from potential investors, partners, and customers. But unlike previous programs, they would also attend breakout sessions with health industry experts that focused on one of four specific biomedical markets: therapeutics, diagnostics, devices, or digital health tools. The “Lean LaunchPad for Life Sciences & Healthcare” pilot program launched in October 2013, enrolling Fujimura’s team and 27 others.

For Fujimura, the training bore an exotic whiff of the nearby Silicon Valley. “We’re basic scientists, so we didn’t really know much about” entrepreneurship, she says. “It was kind of like pearls before swine.”

Ultimately, the hunt for a market brought frustrating news for Fujimura’s team. Patients they interviewed were “lukewarm” about their idea, she says. “At that point, we realized our technologies weren’t advanced enough to really help them.” And Fujimura is far from alone: Of 296 NSF-funded teams that have gone through the curriculum, 173 decided not to start companies for now, says NSF I-Corps chief Rathindra DasGupta.

Still, he says, even teams that abandon their ideas get value from the program. I-Corps-educated principal investigators can explain the importance of their research by keeping the end user in mind and can better advise their students on the realities of commercialization. And graduate students have a head start on launching future startups or finding jobs in industry. Fujimura agrees the experience was far from a bust. “You do this so that you don’t waste millions of dollars and millions of hours of sweat equity,” she says.

Hoping to impart the same wisdom on its grantees, NIH announced they would adopt the I-Corps concept in a 7 April press release tied to a White House event promoting innovation. But the NIH version won’t initially target bench scientists. Instead it will focus on grantees already involved in one of the agency’s programs aimed at commercializing biomedical discoveries.

Specifically, NIH will start with about 25 grantees, many of them small companies, which have received early, “phase 1” grants of up to $150,000 from its Small Business Innovation Research (SBIR) program. (SBIR money comes from a “tax” on agency research budgets and is aimed at ushering technologies through the early stages of commercialization.) It will then expand the offer to researchers funded through two other programs: the commercialization-focused National Center for Advancing Translational Sciences and the National Heart, Lung, and Blood Institute’s NIH Centers for Accelerated Innovations program.

“We want to put some of our companies through [I-Corps] to see how it works for them,” says NIH's Matthew Portnoy, who coordinates the SBIR program. “Does it work as well as we’ve heard the regular version of the I-Corps has been working?” And if the SBIR grantees that have been through I-Corps fare better than average in later phases of the commercialization process, he says, the agency may consider further scaling up its I-Corps offerings.

Blank, who has made the life science-friendly I-Corps his pet project, believes NIH is making the right move. “The NIH model for translational medicine is now ripe for the next step,” he told ScienceInsider at an 11 April meeting of the I-Corps leadership in Bethesda, Maryland. The features unique to a biotech startup’s business model “are really important, but they’re understandable, and they’re teachable, and the PIs need to know them.”

*Clarification, 24 April, 1:40 p.m.: Although many teams decide not to start a company at the end of the I-Corps curriculum, many of them start companies later on. This version clarifies that 173 teams decided not to start companies for now.